Vishal Sikka’s exit hits stock market

IANS

Saturday, 19 August 2017

After three straight sessions of gains, the Sensex opened lower and dropped further before ending down 270.78 points, or 0.85 per cent, at 31,524.68. Weighed down by the IT index, the 50-share Nifty too closed lower 66.75 points, or 0.67 per cent, at 9,837.40. During the session, it shuttled between 9,783.65 and 9,865.95.

MUMBAI: Scrips of global software major Infosys on Friday plummeted almost 10 per cent, losing around Rs 29,000 crore in terms of market capital, post the resignation of Vishal Sikka as its Chief Executive Officer (CEO) and Managing Director (MD). In the process, it pulled down two key market indices by almost one per cent.

After three straight sessions of gains, the Sensex opened lower and dropped further before ending down 270.78 points, or 0.85 per cent, at 31,524.68. Weighed down by the IT index, the 50-share Nifty too closed lower 66.75 points, or 0.67 per cent, at 9,837.40. During the session, it shuttled between 9,783.65 and 9,865.95.

According to market observers, the fall in the scrip price of the company is the biggest since January, 2013.

Stocks of the IT major plunged 9.52 per cent on the BSE and traded at Rs 923.90 per share, down Rs 102.15 from its previous session’s close at Rs 1,021.15 per share. “Post quitting news of Vishal Sikka, the stocks of the company plummeted. Infosys has lost almost Rs 29,000 crore in market cap, post the news,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“This is the highest cut in prices since January 2013, during which the stock prices had fallen by 14.5 per cent,” he added.

The plunge in the stocks of the company led the overall S&P BSE IT index to decline by 360.32 points or 3.45 per cent.

The key Indian equity indices, too, tumbled during the mid-afternoon trade session due to a heavy sell-off in the IT, healthcare and banking stocks.

Around 2.35 p.m., the Nifty50 of the National Stock Exchange (NSE) fell by 79.85 points, or 0.81 per cent, to trade at 9,824.30 points. The 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 31,729.88 points, traded at 31,486.85 points -- down 308.61 points, or 0.97 per cent, from its previous close at 31,795.46 points. Infosys on Friday announced that Sikka has resigned.

“The Board of Directors has accepted the resignation of Vishal Sikka ... with immediate effect at its meeting held on Friday,” said the IT major in a statement.

The Board, however, appointed the 50-year-old Sikka as Executive Vice-Chairman and will hold office until the new CEO and MD takes charge by March 31, 2018.